More independence and powers for the office of the Tax Ombud

The Office of the Tax Ombud (OTO) is pleased with the amendments to the Tax Administration Act, which not only give the Tax Ombud more powers when addressing taxpayers’ complaints but also strengthens its independence from the South African Revenue Service. On 19 January 2017 the proposed amendments to the Tax Administration Act (TAA), which led to the promulgation of the Tax Administration Laws Amendment Act No 16 of 2016 . The amendments follow extensive inputs into the TAA by the Tax Ombud, who had called for inter alia changes to sections of the Act that compromised the office’s independence.

For instance; in terms of section 15(1) of the Act, the Tax Ombud could not employ his own staff directly, he could only do so in consultation with the Commissioner of SARS and in terms of section 15(4) of the Act, the expenditure connected with the functions of the Office would be paid out of the funds of SARS. These provisions were anomalous, given the fact that the Ombud’s mandate is to investigate complaints against SARS itself. The amendments to the Act removed the requirement to consult with the Commissioner when the Tax Ombud appoints his staff. In addition the expenditure connected with the functions of the office is paid in accordance with the budget approved by the Minister for the office.

The Tax Ombud is now also mandated to review at the request of the Minister or at his (TO’s) initiative with the approval of the Minister, any systemic and emerging issues related to a service matter or the application of the provisions of the Act (TAA) or procedural or administrative provisions of the Tax Act, bringing the OTO in line with similar entities in other jurisdictions such as Australia, US and Canada.

The CEO of the Office of the Tax Ombud, Advocate Eric Mkhawane says that the amendments are encouraging and a step in the right direction in ensuring that the TO can fulfil his mandate without a perception that his office is an extension of SARS.

Other important changes in relation to the Office of the Tax Ombud include the following:

• The term of the Ombud is now 5 (five) years an increase from 3 (three) years.
• Where an Ombud makes recommendations to SARS and such recommendations are not accepted by SARS or the taxpayer, reasons for such decision must be provided to the Tax Ombud within 30 days of notification of the recommendations.

The Office of the Tax Ombud is available for interviews to provide more insight into the implications of the Tax Administration Law Amendment ACT to the OTO.